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May 5, 2023 by ash

Top 10 NSW suburbs defying the downturn with double-digit growth

They’re the suburbs that are defying the downturn – a handful of regional towns recording double digit growth as Sydney prices slip.

PropTrack data shows towns in the Riverina, Murray, New England and North West regions of NSW saw prices surge by up to 20 per cent over the past 12 months.

At the same time, greater Sydney values dropped 7.5 per cent from their peak in February last year, with regions popular during the pandemic, like the Northern Beaches, falling as much as 15 per cent.

Adelong in the Riverina region topped the list of high performing house markets with the median value rising 22 per cent to $395,000 in one year.

Merriwa in the upper Hunter came second following a 21 per cent increase in house prices to a median of $393,000.

The wheat growing town of Gilgandra, just north of Dubbo in the Orana region, saw house prices rise 20 per cent to a median of $241,000.

Cessnock is a suburb in the Cessnock Region of New South Wales. Cessnock has a population of 15,179 people and 33.03% of its occupants live in rental accommodation. The median listing price for houses is $580,000 and this has changed 11.53% over the past year and changed 38.42% over 2 years.

The median rent in Cessnock for houses is $460 per week and the median rental yield is 4.12%.

In the unit markets, Moama, Scone and South Tamworth topped the list with 27-30 per cent growth.

PropTrack economist Eleanor Creagh said affordability and space were key drivers.

“Regional areas continue to hold up better than capital cities with people continuing to take advantage of the relative affordability that exists,” Ms Creagh said.

She said the pandemic-induced preference shift towards larger homes and more space was still in play, though not to the same extent it was during the height of the treechanger movement.

“Another key theme is the fact we’ve seen more expensive property types and regions recording a faster pace of price falls. That’s happening across the capital cities, but it’s also happening across regional areas,” she said.

More expensive areas that experienced strong price growth during the pandemic, such as the Illawarra, the Byron Shire and the Southern Highlands, had seen a faster pace of price falls over the year.

“Since the first interest rate rise in May last year, maximum borrowing capacity for potential borrowers has been constrained by close to 30 per cent,” Ms Creagh said.

“So we’re seeing demand and price growth holding up better in areas that are comparatively more affordable.”

“In some regions, such as the New England and North West, the Riverina Region, the Murray region, home prices continue to rise to fresh peaks.”

The only two Sydney suburbs to make the list, Bayview and The Rocks, proved outliers – both being prestige markets with scant supply.

Bayview unit values increased 24 per cent to $1.5m while apartments in The Rocks went up 19 per cent to $2.05m.

Ms Creagh said affordability would continue to drive housing performance over the next couple of months, with prices declining at a slower rate as interest rates moved closer to the peak.

“There’s very likely at least another two interest rate rises to come,” she said.

“With that, borrowing capacities are going to continue to reduce, mortgage servicing costs are going to continue to rise which will be a headwind to home prices.”

“Looking further ahead when the RBA pauses their tightening cycle, at that point we’ll probably begin to see home prices stabilising as some of that interest rate uncertainty reduces.”